Beware! Some Banks Lie About No Minimum Balances

A great thing about online savings accounts with no minimum balances is that theoretically you can just move all your money to the one currently paying the highest interest! (If it’s worth it.) But, from e-mails I have gotten and other reports on the web, you might want to leave some more spare change in those accounts. Specifically, Capital One 360 and Emigrant Direct have closed people’s accounts without warning for having balances of less than $1. On top of that, Emigrant doesn’t pay interest if your account is closed before the end of the month!

But they have no minimum balance you say. Yes, but in their fine prints they can also close your accounts at any time, for any reason. So I’d advise keeping $5+ in your accounts to avoid account closure and lost interest. This way, if the rate leaders change, your options stay open.

i tried to open an account with emigrant in the beginning of january. they made the initial deposits to my funding account. i used the link they sent me to verify those deposits and then i patiently waited for the information i needed to log onto my account online. i never got anything else until i recieved my ?final statement? in the mail dated 1/17/06. ?total days in statement period: 14? what the hell? they never even took the one dollar out of my funding account for the initial deposit. and needless to say i did not get my bonus.

I think Bankrate lists $1 minimum because that is the minimum that is required for them to pay you interest. I know this is the case for Emigrant, maybe others too. If you $0.99 sitting in the account, it will never grow.

This is a useful post. You should consider adding a link to it on your “Online Bank Comparison” page.

Last year, I reduced my Emigrant balance to $1 for a few months. Then I reduced it to $0. Emigrant closed my account mid-statement and issued a final statement to close the account. It wasn’t hard to reopen the account and keep my account number when they had the better APY months later. Now I keep a dollar in there. 😉

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Rates and terms set on third-party websites are subject to change without notice. Per FTC guidelines, MyMoneyBlog.com has financial relationships with the merchants mentioned. MyMoneyBlog.com is compensated if visitors click on any outbound links and generate sales for the said merchant.

The editorial content on this site is not provided by the companies whose products are featured. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser.